A recent study on the significance of gender for Hispanic savings and retirement found two important things:
1. Hispanic women have a huge appetite for financial education and a strong desire to save
2. Their savings could provide a critical safety net to America’s largest minority group.
“This study demonstrates that if financial information is communicated simply and respectfully, and in culturally and linguistically competent ways, Latinas, especially, will listen,” said Karen Richman, Ph.D., the principal investigator of the study, a collaboration between the National Endowment for Financial Education and the University of Notre Dame.
Reasons for Low Retirement Savings
Despite a desire to save, low earnings mean Hispanic women have much lower retirement account balances than any comparable demographic, the study found. Employment paths have a lot to do with these outcomes. According to the study, Hispanics switch jobs more frequently than other demographics. What’s more, they tend to accept positions that do not provide retirement savings benefits.
The research went on to show that Hispanics with employer-sponsored retirement plans are 50 percent more likely than whites to make hardship withdrawals. Hispanic women are more likely than Hispanic men to liquidate pensions with a lump-sum payment or to spend rather than reinvest their savings when they change jobs. Additionally, Hispanic women tend to see retirement accounts as a source of liquidity. They may take loans and early withdrawals, often to help others, and they end up paying large penalties.
How Credit Unions Can Help
Below are a few key takeaways from the study and what they mean for credit unions.
• Hispanics have the highest labor participation, and yet the lowest retirement security. Hispanic women would benefit from workplace financial education, particularly during job transitions as they are deciding what to do with retirement accounts. Credit unions can provide financial education, as well as investment and savings products in a way that’s relevant to this influential and growing audience.
• Hispanic women tend to be the administrators of family finances. The female head of the family often makes tough decisions without knowing all the options. Credit unions can address Hispanic women’s appetite for financial education and desire to save through direct outreach, relationship building and financial education opportunities. A great way to gain a better perspective on what Hispanic women need is through the creation of a Latina advisory group.
• Hispanic men and women are equally likely to participate in collective financial practices based on “confianza,” or “mutual trust.” Credit unions should work to develop relationships with Hispanics based on trust. They should position themselves as a dependable resource for the community through product accessibility, bilingual staff and community investment.
As this study reveals, a gap exists for Hispanic women in terms of saving for retirement. Credit unions, with their financial expertise and their people helping people philosophy, are well positioned to address this gap.Leave a comment
A Nielsen report released last month details the growing consumer power and influence of Hispanic females living in the U.S. According to the report, Latina 2.0: Fiscally Conscious, Culturally Influential & Familia Forward, this demographic grew 37 percent between 2005 and 2015, compared to 2 percent for their non-Hispanic White counterparts and 11 percent for total women in the U.S. Younger Hispanic women are also outpacing the rest of the nation in buying power.
Below are a few key findings in the report, along with actions credit unions should consider – especially as we close out another successful National Hispanic Heritage Month.
Credit union actions: Consider starting a program to provide young entrepreneurs access to capital, mentorship and networking opportunities – with a special focus on Hispanic women.
Credit union actions: Ensure your products, services and marketing materials are culturally relevant and language appropriate for Hispanic members.
Use of Mobile
Credit union actions: When planning your mobile banking and payments strategies, recognize Hispanic females as a key audience. Consider holding focus groups or other forums for getting feedback from a cross-section of members. When possible, incorporate video into your Hispanic-focused communications strategy.Leave a comment
Achieving a variety of inclusivity and diversity objectives is becoming more important for credit union boards of directors. One such board is that of Community 1st Credit Union in Ottumwa, Iowa. The Juntos Avanzamos-designated credit union recently welcomed Edith Cabrera-Tello to its board.
I’ve been a member of the credit union since 2011 and a board member since January 2016.
What is your view of credit unions as a financial option for the Hispanic community?
What changes have you seen in how Community 1st serves its members and specifically its Hispanic members since you’ve been a board member?
How has the work with Coopera and receiving the Juntos Avanzamos designation impacted outreach to the Hispanic community?
Could you describe your experience as a board member of a credit union from the moment you decided to volunteer until now?
What advice do you have for any potential Hispanic board members thinking about or having been approached to serve on the board of a credit union?
I recently appeared on an episode of the CU Broadcast to discuss the Hispanic market opportunity for credit unions. The host, Mike Lawson, and I talked through quite a few topics, most notably how credit unions can earn the trust of young, unbanked Hispanics.
The video is also archived at CUBroadcast.com, along with many other insightful episodes of the show. If you get a free minutes, visit the site and watch a few…Leave a comment
By Guest Blogger Michael Adams, Vice President of Marketing and Public Relations at Greater Iowa Credit Union
In working with Coopera, we have found it important to get the structural components in place before launching any significant outreach to the Hispanic community. This includes things like laying a solid foundation complete with Hispanic-friendly membership policies, as well as securing employee, leadership and board support. Only after this can you begin to do the fun stuff, like product development or marketing.
Not everyone on a credit union’s leadership team or board of directors may be fully supportive of an Hispanic outreach program, and some products, such as ITIN loans, for example, may be downright scary to them. A vocal board member who is not on board can create barriers to any proposal. We discovered early on that some credit union administrators and board members can have a knee-jerk reaction to the creation of an aggressive Hispanic initiative.
More often than not, education regarding the needs of this community is necessary. Once you do get a good customer identification program in place and board support, you can begin the rewarding work of reaching out to the Hispanic community with products and services that are useful to them, such as remittance services, free checking, reloadable debit cards, ITIN and other culturally relevant loans.Leave a comment
By Guest Blogger Oscar Porras, Community Liaison at Maps Credit Union
The 2010 U.S. Census showed that the Hispanic population increased 43 percent since 2000. In our neck of the words (Oregon), we’ve seen a whopping 63.5 percent increase over the same period of time. An essential part of reaching out to our Hispanic neighbors is presenting products and services in a way that is culturally relevant.
At Maps Credit Union, in cooperation with Coopera, we are working to add some of the services that are most important to the Hispanic community, such as credit builder loans, remittance services and prepaid reloadable cards. We have set up inter-departmental teams to discuss these products, and we look forward to rolling out our first new product in the first quarter of 2012.
It has not been easy. There have been some challenges, including negative attitudes from a small number of staff. Then again, anything worth fighting for always brings challenges. We are working to address our internal and external issues through open and honest communication. Racism, stereotypes, and the like all come from misinformation. Educating staff about their new neighbors will help foster a credit union culture of acceptance and understanding.
I look forward to my new role as Community Liaison at Maps Credit Union and adding another wonderful piece to our credit union culture. I would love to hear about your challenges and victories as your institutions move toward a greater focus on welcoming the members of your local Hispanic communities.Leave a comment
There’s no better time than the present to begin preparing for 2012’s month-long celebration of the Hispanic heritage and culture, Hispanic Heritage Month.
Credit unions across the country found ways to engage with their local Hispanic community’s during last year’s Hispanic Heritage Month. Our VP Miriam De Dios recently shared a few of those efforts with Credit Union Magazine’s online readers. Below is an excerpt from that article. For more, visit creditunionmagazine.com.
All over the country, credit unions are discovering opportunities to participate in community celebrations. Maps Credit Union in Salem, Ore., is partnering with Western Oregon University to launch the Latino Education and Access Program, which helps Hispanic students further their education with scholarships.
Fundraising for the program will be kicked off by former Mexican President Vicente Fox.
Maps Credit Union will also be a silver sponsor of the Hispanic Heritage Month Breakfast, Oregon’s official kick-off celebration for Hispanic Heritage Month.
Des Moines Metro Credit Union also plans to participate in its community’s Hispanic Heritage Month celebrations. The ninth annual Iowa Latino Heritage Festival will take place in Des Moines in September.
The credit union will not only have a booth at the festival to meet with current and potential members, it will also sponsor an elote (corn) eating contest.
How can your credit union participate in 2012’s Hispanic Heritage Month? It can be as simple as:
• Informing your members and the community about Hispanic Heritage Month events;
To read the full article, visit creditunionmagazine.com.Leave a comment
The following is an excerpt of a newly released white paper by Coopera’s Miriam De Dios covering the potential for reloadable prepaid cards in the Hispanic market. If you’d like a copy of the full paper, send me an email, and I’d be happy to send it over.
While our consulting capacity has allowed us to observe almost all best-practice tactics out there, we believe FIs that offer a reloadable prepaid card to the Hispanic market will be among those achieving the greatest success. Perfectly tailored to the Hispanic consumer, this type of offering has the potential to ease consumer financial pain, to build trust between cardholders and an issuing FI, and to generate fee revenue and loyalty from a powerful market.
For FIs interested in the Hispanic market, it makes sense to think in terms of products and services that would appeal to consumers who don’t have a traditional banking relationship already in place. Creating affordable alternatives to meet the needs of underserved Americans not only has the potential to get a foot in the door of the Hispanic community; it also helps your FI lead its customers down a path to financial responsibility.
Because they don’t allow for overspending, reloadable cards help underserved consumers manage their budget-conscious lifestyle. This puts issuing FIs in a position to nurture the financial growth of prospective members, quite possibly turning underserved consumers into some of their most loyal customers.
Before embarking on any Hispanic outreach, however, FIs must understand the importance of building trust slowly. While product offerings – such as reloadable prepaid cards – are a great start, adding a healthy Hispanic membership base truly is a longer-term effort requiring the support of FI staff and leadership.Leave a comment
Hispanics continue to be an important group for many of America’s states. Thanks to the newly published 2011 Hispanic Opportunity Report, commissioned by the Texas Credit Union League (TCUL), we understand even more about this population in the state of Texas.
A long-time partner of the TCUL and supporter of the Juntos Avanzamos designation, Coopera was commissioned to write the report to help Texas credit unions better understand data revealed by the 2010 Census.
Here are a few of the report’s highlights:
Two-thirds of the state’s growth over the past decade came from Hispanics.
Hispanic Texans are five times more likely to be unbanked than are the state’s whites.
Hispanics will comprise 53% of the state’s population by 2040, and whites will make up just 32%.
If credit unions attain 10% penetration of the state’s Hispanic adults, it would mean an estimated $326 million in total income and $3.5 billion in loans.
Of the nearly 1 million children added to the Texas population in the last decade, 95% of them were Hispanic.
In Texas, one in five dollars of purchasing power is in Hispanic hands.
We are pleased that TCUL has been so proactive in providing this report to its members. Texas is the first state to request specific information about credit unions’ Hispanic opportunity since the 2010 Census was finalized. Coopera believes the information in the report will motivate Texas credit unions to pursue this market more intentionally.Leave a comment
The 2010 U.S. Census revealed that one in six U.S. residents is Hispanic, and among children, it’s one in four. By 2050, analysts predict that statistic will soar to one in three.
When you look at the numbers, it’s easy to see why the term “emerging,” which has been used to describe the U.S. Hispanic community, isn’t really all that fitting today. For that reason, it’s no longer appropriate to think of the Hispanic consumer as someone your credit union may need to court in the future. Rather, you need to understand how to market to this type of consumer today.
In cooperation with CUNA, Coopera regularly surveys credit unions of varying sizes. This research has shown that a much higher concentration of credit unions have focused on serving the Hispanic market in recent years. Between 2008 and 2009, we found that the number of credit unions either executing or planning Hispanic-market programs more than tripled.
Undoubtedly you have witnessed the growth of the Hispanic market in either yours or a neighboring community. While getting ahead of the curve may no longer be possible, there is still a tremendous opportunity to tap into the power of this population now. We advise you not to wait another year.Leave a comment